Do rewards and recognition impact employee productivity?
From a 94% measurable productivity increase to supplying purpose and satisfaction, here are 11 answers to the question, “Do rewards and recognition impact employee productivity?”
- Increase Creativity by 94% With Recognition
- Try Informal Rewards
- Leverage a Recognition and Rewards Combo
- Recognize It’s Not a One-Size-Fits-All Approach Anymore
- Take Time to Recognize Efforts, Not Just Results
- Ask Employees What They Want
- Learn What Makes Your Team Unique
- Help Employees Feel Appreciated and Challenged
- Remember It’s Only One Part
- Boost Your Team’s Spirits and Productivity
- Merge Purpose and Satisfaction
Increase Creativity by 94% With Recognition
Employee recognition is an essential element of a successful company, as it provides staff with both tangible and intangible benefits. Studies have shown that over 80% of employees feel that recognition for their work boosts morale, inspires them to do better, and encourages a positive work environment.
Employee recognition can also help boost productivity levels, with 94% of employees reporting increased creativity and confidence after being praised for their efforts. Moreover, employee turnover rates can be reduced by up to 28% when staff is recognized for their performance.
When organizations implement regular and meaningful recognition programs, it creates a strong sense of loyalty between employers and employees, which helps create a winning team culture.
Try Informal Rewards
Rewarding and recognizing employees can have a positive impact on their productivity, but it depends on how it’s done. If the rewards and recognition are informal, they can encourage employees to be more productive. However, if the rewards and recognition are formal, they could have the opposite effect.
Informal rewards and recognition can take many forms. For example, managers can give employees praise or recognition for a job well done, or they can give them a small gift such as a coffee mug or a T-shirt with the company logo on it.
Formal rewards and recognition are often more tangible, such as a bonus or a pay raise. While these can have a positive effect on employee productivity, they can also make employees feel like they have to work harder to earn them. This may cause them to be less productive than they would be without these formal rewards and recognition.
Leverage a Recognition and Rewards Combo
Our company leverages both to maintain high productivity. We have a company-wide reward for hitting delivery and quality targets that represents about 15% of each team member’s total compensation.
Our organization also leans heavily on recognition. We promote heavily from within, and 80% of our managers, senior managers, and leadership started as line-level employees. A focus on both reward and recognition has contributed to our company hitting productivity targets every month for the last three years.
Recognize It’s Not a One-Size-Fits-All Approach Anymore
Rewards and recognition are a cornerstone of HR, but they don’t always impact employee productivity. Why, you ask? Misalignment.
Not everyone is motivated by the same rewards and recognition. However, I do believe that when employees can have a choice in how they are rewarded and what type of recognition they receive, there is a much greater chance that productivity will rise.
For example, some people prefer a reward to be more time off, a bonus, a gift certificate, the opportunity to try something new, a flex shift, etc. It’s not a one-size-fits-all approach. The same goes for recognition; some people prefer public praise for a job well done, while others prefer a private email, and yet even others don’t want recognition at all—they might just want the reward.
Each person is unique, and so which reward(s) and recognition resonate with them and drive their productivity is unique as well.
Take Time to Recognize Efforts, Not Just Results
Recognition is one of the greatest contributors to performance on any team. As a leader, taking the time to recognize HOW your team managed change can help them feel more confident in managing change moving forward.
Here are some ways you can recognize your team through change. It’s important to recognize people’s efforts, not just the result they produce, such as:
- Taking time to acknowledge team members who previously resisted change and now embrace it
- Acknowledging your team’s honest feedback and continuous open communication
- Acknowledging and recognizing both on a team level and individual level, and considering various forms of communication
- sending a message over chat tools or an email, or on a team call
Recognition is an enormous factor in relationship and trust building and is an important part of a leader’s job. Let’s take a look at how much impact recognition can have within teams and how leaders can create an environment of acknowledgment.
Shauna Moran, Founder, Operate Remote
Ask Employees What They Want
Through both my professional experience and personal observations, I have noticed that rewards and recognition can positively affect employee productivity, though the effect it has varies depending on the individual.
Some employees take it as extra motivation to improve their performance and productivity, labeling it as a defiant reminder of their goal. On the other hand, some may become more discouraged when singled out for a job well done; in particular, those who are either demotivated from competing against others or uncomfortable being in the spotlight.
That being said, offering words or prizes to accompany great work can be beneficial depending on each case, as studies have shown that providing an incentive appeals to an intrinsic need without necessarily dictating achievement levels.
Learn What Makes Your Team Unique
There is no longer room for generic rewards and one-size-fits-all benefits. Individualized incentives are soon to be par for the course. This is all part of the movement to see employees as humans rather than numbers on a spreadsheet.
Each employee has different needs, wants, and ambitions. Similar to persona creation methods in marketing, businesses should learn what makes each of their employees unique and cater to that wherever possible. This might take the form of well-being bonuses that are customized for each person.
Help Employees Feel Appreciated and Challenged
Employees need to feel appreciated and challenged in order to use their full potential, and that’s exactly what rewards and recognition are for. When they feel this way, they will give their best effort in everything they do.
When you recognize an employee for their outstanding performance, it gives them validation and satisfaction for the good work they have done. Once their names are out there, they will never want to go back and will always try to outdo themselves next time.
Besides all that, a culture of rewards and recognition promotes positivity in the workplace, because all human beings want to be heard and valued.
Remember It’s Only One Part
No one thing makes productivity go up or down. Think about yourself: Can you trace back productive days to just one factor? I can’t. For me, productivity is a factor of my mood, my environment, my kids’ moods, a clear goal, my calendar—the list goes on.
On top of that, each person is different. What makes me productive may not work for others.
Asking if rewards and recognition impact productivity is like asking, “Does the rudder make an airplane fly?” The answer is yes, on the condition that all other parts are working well.
Boost Your Team’s Spirits and Productivity
From my experience as both an employee and a business leader, I say that rewards and recognition absolutely impact employee productivity. People naturally work more enthusiastically when their efforts are acknowledged and appreciated by those around them—this is further enhanced when they are rewarded for their work.
This motivates an employee to sustain their quality of work, which is a natural response to such positive reinforcement. Some good old “R&R” as rewards and recognition can be a powerful way to boost the spirits of an employee and ultimately boost their productivity.
Merge Purpose and Satisfaction
Rewards and recognition definitely impact employee productivity. Through incentives like bonuses, public acknowledgments, or extra days off, management can create positive reinforcement for employees to work hard and perform well.
This kind of positive reinforcement is essential for creating a motivating work environment that encourages employees to go above and beyond. By recognizing their hard work, employees are more likely to continue putting in the extra effort needed to reach their goals and produce high-quality results.
Furthermore, when people feel they are being valued and appreciated for their hard work, it can give them a sense of purpose and satisfaction, which can lead to increased productivity levels.
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